123rd MAINE LEGISLATURE
		LD 1832		LR 334(01)
	An Act To Amend the Unemployment Compensation Laws
	Fiscal Note for Original Bill
	Sponsor: Rep. Duprey of Hampden
	Committee: Labor
	Fiscal Note Required: Yes
Fiscal Note
Current biennium cost increase - Other Funds Potential current biennium revenue decrease - Federal Expenditures Fund
			2007-08	2008-09	Projections 2009-10	Projections 2010-11
Net Cost (Savings)
	General Fund		$376,262	$104,733	$109,970	$115,469
Appropriations/Allocations
	General Fund		$376,262	$104,733	$109,970	$115,469
Fiscal Detail and Notes
	Paying bonus payments to certain individuals who are receiving unemployment benefits and find work within a specified time frame will have a financial impact on the State as a self-insured employer in an amount that can not be determined at this time.
	The Bureau of Unemployment Compensation will require ongoing General Fund appropriations of $376,262 in fiscal year 2007-08 and $104,733 for one Staff Accountant position, 2 Claims Specialist positions and related all other to support the increase in research and analysis work associated with providing a bonus to individuals who are receiving unemployment and find work within a certain timeframe and with individuals providing proof of having contacted a minimum of 5 employers each week in order to be eligible for unemployment compensation.
	The provision to pay a bonus to individuals returning to work within 3 weeks or 6 weeks after making an initial claim for benefits from the Unemployment Compensation Trust Fund would create a conformity issue with the Federal Unemployment Tax Act (FUTA) Section 3304 (a)(4) because it does not meet the definition of unemployment compensation.  Being ruled out of conformity under this section would jeopardize Maine employers' FUTA tax credits of over $200 million and administrative grants for the Bureau of Unemployment Compensation of $12.66 million for 2005-2006.   It would also affect grants for the Bureau of Employment Services and the Division of Labor Market Information Services.
	In order to remove the conformity issue, this bill could be amended to direct that the bonus provision be paid from an alternative funding source.  The Department of Labor estimates that approximately 14,800 individuals could be eligible for a 2 week bonus and 4,400 individuals could qualify for a 1 week bonus for benefit years ending in 2006.  Given the most recent average weekly benefit amount of $241.48, the bonus provision is estimated to cost approximately $8.2 million.